May 17, 2021 Special City Council

OKAY.

[00:00:01]

[1. CALL TO ORDER]

WE DO HAVE A QUORUM OF CITY COUNCIL MEMBERS HERE,

[2.(a) Presentation by Jon Hockenyos on the economic forecast and City sales tax projections.]

MARION COUNCIL.

JOHN HAWKINS IS WITH US TONIGHT.

WE HAVE UTILIZED SEAN OVER THE YEARS TO ASSIST US WITH SALES TAX FORECAST AND AS WELL AS LOOKING AT IT, OUR ECONOMY AND WHAT IMPACT DURING CALMER TIMES WOULD BE.

AND WE ACTUALLY, HE WAS DRIVING IN FROM AUSTIN.

SO I WANTED TO MAKE SURE ANYWAY, JOHN IS HERE TONIGHT.

IN FACT, LAST YEAR, UH, WE KIND OF TRACKING, WE, UH, OUR SALES TAX WENT THROUGH THE ROOF, AS YOU KNOW, UH, WE WEREN'T ANTICIPATING THAT DIDN'T UNDERSTAND IT.

JOHN, UH, HAS BEEN WORKING WITH US OVER THE YEAR, ASSISTING US WITH THAT AND LOOKING AT IT, LETTING US KNOW WHAT IT'S GONNA LOOK LIKE IN THE RECOVERY AND COMING OUT OF IT AND WHAT IMPACT THAT MAY HAVE ON SALES TAX AND OTHER ASPECTS OF OUR ECONOMIC, UH, REVENUES THAT WE BRING IN NEXT JANITORS, AS A MATTER OF FACT.

SO IF CAN JOHN, THANK YOU, SIR.

THANKS MAYOR.

AND COUNCIL.

IT'S GREAT TO SEE YOU ALL.

AND YES, I DID NOT DRIVE UP DRAMA NIGHT AND ALTHOUGH I WOULDN'T ADVISE ANYBODY OUT THERE AT THIS POINT, IF I CAN I RUN THE PRESENTATION RIGHT FROM HERE.

OKAY, GREAT.

SO I KNOW YOU GUYS HAVE A VERY PACKED AGENDA TONIGHT.

AND SO THERE ARE A NUMBER OF CHARTS AND GRAPHS IN HERE THAT PROVIDE COLOR TO WHAT I'M GOING TO SAY, BUT I'M GOING TO HIT THE HIGH POINTS AND THEN GIVE YOU ALL TIME TO ASK QUESTIONS AS WE GO ALONG.

YOU KNOW, THE THING THAT HAS BEEN REALLY INTERESTING IN THIS WHOLE EQUATION IS, IS THAT THERE IS REALLY, REALLY A WHAT ECONOMISTS CALL CALLED K SHAPE RECOVERY GOING ON, WHICH MEANS MOST SEGMENTS OF THE ECONOMY ARE DOING GREAT.

AND I'LL TALK A LITTLE BIT ABOUT SOME OF THE REASONS FOR THAT SHORT VERSION IS IF YOU WORK A JOB THAT CAN BE DONE REMOTELY, AND IF YOU GET PAID A SALARY, YOU'RE PROBABLY DOING GREAT.

IF YOU WORK A JOB WHERE YOU HAVE TO HAVE FACE-TO-FACE INTERACTIONS WITH YOUR CUSTOMERS OR WITH THE FOLKS COMING IN AND, OR YOU GET PAID BY THE HOUR, YOU MAY BE HAVING SOME CHALLENGES.

MOST OF THE IMPACTS HAVE REALLY BEEN FELT IN THE LEISURE, IN THE HOSPITALITY SECTOR OF THE ECONOMY.

THAT'S NOT A HUGE PIECE OF YOUR ECONOMY HERE IN MISSOURI CITY.

THAT'S GOOD.

UH, IN THE REGION, THE HOUSTON METROPOLITAN REGION, THAT SEGMENT OF THE ECONOMY IS DOWN ABOUT 35,000 JOBS FROM MARCH OF 2020.

SO OVER THE COURSE OF THE PANDEMIC, THEY'RE DOWN ABOUT 35,000 JOBS BY THE SAME TOKEN BECAUSE SMALL BUSINESSES TEND TO BE IN SECTORS OF THE ECONOMY THAT RELY ON FACE-TO-FACE INTERACTIONS.

YOU KNOW, THEY'VE BEEN DISPROPORTIONATELY HIT BY THIS EQUATION.

SO THAT'S OBVIOUSLY SOMETHING THAT'S TO PAY ATTENTION TO.

I WOULD GUESS I WOULD SAY AGGREGATE CONSUMER SPENDING HAS LARGELY RECOVERED CHARACTERS CHANGED A LOT, AND FRANKLY IT'S CHANGED TO THE BENEFIT OF MISSOURI CITY, LESS ABOUT SPENDING ON EXPERIENCES.

WE'RE NOT TRAVELING AS MUCH.

WE'RE NOT GOING OUT TO EAT AS MUCH.

WE'RE NOT TAKING TRIPS.

WE'RE NOT BUYING BOATS.

WE'RE NOT DOING ANY OF THAT.

STAB MORE SPENDING ON STUFF, THINGS, ESPECIALLY THINGS THAT CAN BE DELIVERED TO YOUR DOOR LOCALLY.

THAT MEANS IN THIS REGION KIND OF UNIQUE SHOPPING EXPERIENCE OF TAKING THE BRUNT, BUT FOR COMMUNITIES LIKE MISSOURI CITY, WHERE A LOT OF FOLKS ARE WORKING FROM HOME AND NOW THEY'RE GETTING STUFF SENT IN AND THAT'S GOOD.

AND THAT'S PART OF THE EXPLANATION WHILE YOUR SALES TAX HAS DONE SO WELL, A LITTLE BIT OF STUFF IN HERE ON MULTIFAMILY ON REAL ESTATE.

I SHOULD SAY IT'S A PERFECT STORM FOR OWNER OCCUPIED RESIDENTIAL.

IT'S THE GRAND SLAM OF EXTREMELY LOW INTEREST RATES, STRONG DEMAND.

WE'LL TALK ABOUT A LITTLE BIT ABOUT INFLATION RECORD LEVELS OF LOCAL ACTIVITY.

MULTI-FAMILIES KIND OF A MIXED BAG.

IF YOU'RE AIMING AT MORE WHITE COLLAR, HIGHER END FOLKS, YOU'RE DOING FINE.

IF YOU'RE AIMING AT FOLKS WHO WORK A MORE BLUE COLLAR JOB, YOU MAY HAVE SOME PROBLEMS INDUSTRIAL AND WAREHOUSE IS DOING GREAT.

AND THAT'S MOSTLY RELATED TO, AGAIN, THIS KIND OF HUNKERING DOWN PROCESS, OFFICE, SMALL RETAIL AND HOSPITALITY.

THOSE ARE THE ONES THAT MAY VERY WELL SUFFER GOING FORWARD.

SO IF YOU LOOK DOWN AT SOME, SOME SIGNIFICANT NEAR TERM FACTORS, ONE OF THE THINGS THAT'S HAPPENED AND I HAVE TO, TO BE HONEST, I DIDN'T SEE THIS COMING.

I DIDN'T SEE US PUMPING SIX AND A HALF TRILLION DOLLARS INTO THE ECONOMY IN THE LAST 12 MONTHS.

THAT IS THE EQUIVALENT OF ALMOST ONE THIRD, OUR ANNUAL ECONOMIC OUTFIT.

THE US DOES ABOUT RIGHT AROUND $21 TRILLION A YEAR WORTH OF ECONOMIC ACTIVITY.

SO WE'VE KICKED IN ABOUT A THIRD.

THAT'S HAD AN EXTRAORDINARY IMPACT.

IT'S IT'S DONE BEEN A NUMBER OF WAYS.

CERTAINLY WE'RE CASH PAYMENTS TO HOUSEHOLDS.

I'LL TALK A LITTLE BIT ABOUT THE IMPACTS OF EXPANDED UNEMPLOYMENT, WHERE THE FEDS ARE TOPPING UP STATE EMPLOYMENT EMPLOYMENT AS WELL.

THERE'S SPECIFIC STUFF, OBVIOUSLY FOR INDUSTRIES LIKE RESTAURANTS,

[00:05:02]

HISTORICALLY LOW INTEREST RATES.

WE TALKED ABOUT ALL THAT TRANSLATES INTO LOTS AND LOTS OF CAPACITY TO SPEND.

AND NOW WE'RE ALL DYING TO GO OUT AND DO IT.

HOW MANY PEOPLE IN THIS ROOM ARE THINKING HARD ABOUT TRAVELING EVERYBODY, RIGHT? EVERYBODY WANT, AND MOST OF US HAVE THE CAPACITY TO DO IT.

SO THAT'S IMPORTANT.

BUT GUESS WHAT INFLATION IS IN FACT, INFLATION ISN'T COMING.

INFLATION IS HERE.

YES.

AGAIN, CONSUMER PRICE INDEX IN APRIL WENT UP 4.2% FROM APRIL OF 2020, THE PRODUCER PRICE INDEX, WHICH HAS ALL THE STUFF THAT FEEDS INTO THE CPI.

THE SAME PERIOD WENT UP 17%, 17% FROM APRIL OF 2021.

BACK TO APRIL OF 2020.

THAT MEANS INFLATION IS HERE.

IT'S THE CLASSIC CASE THAT ECONOMISTS TALK ABOUT HAVE TOO MUCH MONEY CHASING TOO FEW GOODS.

AND THERE ARE FACTORS THAT MAKE IT COMPLICATED.

YOU TALK TO GUYS THAT SAW MILLS, FOR EXAMPLE, ONE OF THE REASONS WHY, SO THERE'S BIG SCREAMING SHORTAGE OF LUMBER RIGHT NOW IS NOT JUST BECAUSE OF TIMBER PER SE.

SO THEY CAN'T GET ENOUGH PEOPLE TO WORK.

THE SONG MILLS RIGHT NOW, YOU OUGHT TO BE RUNNING THREE SHIFTS, EIGHT HOURS A DAY.

THERE'S NOT ENOUGH GUYS WILLING TO WORK IN PART BECAUSE OF ENHANCED UNEMPLOYMENT.

AND SO ALL THESE FACTORS COME TOGETHER TO DRIVE PRICES UP.

WHAT'S GOING TO HAPPEN IN THIS EQUATION.

I CLEARLY, I REALLY DO THINK, I THINK THE FEDERAL RESERVE BANK IS GOING TO TOLERATE A LITTLE BIT OF INFLATION.

I DON'T THINK THEY'RE GOING TO TOLERATE A LOT.

AND SO I'M TELLING PEOPLE, I EXPECT TO SEE INTEREST RATES RISE PRETTY SIGNIFICANTLY BY THE END OF THE SUMMER, AS MORE AND MORE EVIDENCE OF THIS INFLATION IN THE ECONOMY GOES THROUGH.

AND THEN JUST ALLUDED TO THIS A LITTLE BIT.

THERE ARE CHANGES IN THE WAY WE WORK AND THERE CHANGES IN THE WAY WE TRAVEL.

I MEAN, THERE ARE NOW, WE ARE NOW HAVING SERIOUS ECONOMIC DEVELOPMENT CONVERSATIONS ABOUT DIGITAL NOMADS.

HOW MANY PEOPLE HAVE HEARD THAT EXPRESSION? YOU GUYS KNOW WHAT DIGITAL NOMADS ARE.

DIGITAL NOMADS ARE PEOPLE WHO CAN LITERALLY DO THEIR JOBS FROM ANYWHERE.

AND THEY'RE SAYING TO THEMSELVES, YOU KNOW WHAT, WHY AM I PAYING BAY AREA HOUSING PRICES? WHAT I CAN GET A FACEBOOK SALARY AND I COULD LIVE SOMEWHERE ELSE FOR A WHOLE LOT LESS MONEY.

I WAS TALKING TO A COMPANY, A TECHNOLOGY COMPANY IN SAN ANTONIO.

THEY SAID THEY HAVE THEIR HEADQUARTERED IN SAN ANTONIO.

WE HAVE 36 EMPLOYEES, 28 OF THEM DON'T LIVE IN TEXAS PERMANENT HUNDRED EMPLOYEES.

SO THAT'S A NEW THING.

AND THEN I JUST WONDER ABOUT GROUP AND BUSINESS TRAVEL.

ARE WE ALL GOING TO GO BACK TO CONVENTIONS? I DON'T KNOW.

SO LET ME SKIP THROUGH A LOT OF THESE CHARTS.

MOST OF THEM ARE DESIGNED TO ILLUSTRATE SOME OF THE THINGS I WAS TALKING ABOUT.

I'LL STOP AT ONE OR TWO.

THIS ONE, THIS ONE RIGHT NOW, PERSONAL SAVINGS EQUALS ALMOST 22% OF DISPOSABLE PERSONAL INCOME.

NATIONALLY.

WE'VE GOT MONEY TO BURN AS A NATION AND WE'RE GOING TO COME SPEND IT IN A VERY NEAR TERM.

SO THAT ONE IS JUST PRETTY INTERESTING TO PAY ATTENTION TO.

THESE ARE THE INFLATION GRAPHS JUST TOLD YOU WHAT'S GOING ON WITH THAT.

THIS ONE IS ACTUALLY KIND OF INTERESTING.

THIS IS SMALL BUSINESS OPTIMISM.

IT'S NOT SO GREAT.

AND ONE OF THE REASONS IT'S NOT SO GREAT IS ON THIS NEXT CHART.

THIS IS THE PERCENTAGE OF PEOPLE IN SMALL BUSINESSES WHO SAY THEY HAVE OPENINGS.

THEY CAN'T FILL APRIL FIGURES, 44, 44% OF SMALL BUSINESSES ACROSS THE COUNTRY.

RIGHT NOW SAY THEY HAVE OPENINGS THAT THEY CAN'T FILL.

WHY IS THAT IN PART? WELL, WE'LL GET TO, I'LL COME BACK TO THAT IN A SECOND.

BUT PART OF IT IS BECAUSE OF ENHANCED UNEMPLOYMENT.

ALL RIGHT.

SO ONE OF THE THINGS THAT WE HAVE STARTED TRACKING, THIS IS A GREAT WEBSITE.

IT'S CALLED TRACKING THE RECOVERY REAL TIME.

THEY CAN TELL YOU WHAT'S GOING ON IN YOUR COMMUNITY.

THE CHART SHOWS PER 100 PEOPLE COVID CASES AND THAT SINCE THE BEGINNING OF THE PANDEMIC, ACTUALLY, BEFORE YOU CAN SEE HERE IN FORT BEND COUNTY, IT'S DONE AT THE COUNTY LEVEL.

THINGS ARE COMING AND HEADED IN THE RIGHT DIRECTION.

AS OF WHEN I MADE THIS CHART, WHICH WAS LAST WEEK, FORT BEND COUNTY HAD 46% OF THE ADULTS.

VACCINATED, TEXAS WAS AT A LITTLE UNDER 36% US, IS IT A LITTLE OVER 37? IT'S A GOOD SIGN.

THIS IS ALL MOVING IN THE RIGHT DIRECTION BECAUSE THIS IS THE PASSPORT BACK TO A MUCH MORE NORMAL SET OF EXISTENCE.

SO ONE OF THE THINGS THAT THEY DO IN FORT BEND COUNTY, WE WERE ABLE TO TRACK IS THE PERCENTAGE OF TIME COLLECTIVELY WE'RE SPENDING OUTSIDE OUR HOME.

THEY'RE DOING THIS WITH CELL PHONE DATA AND AGGREGATING IT TOGETHER.

SO THIS IS ALL IN COMPARISON TO JANUARY OF 2020, AND THEN TRACK FORWARD FROM THERE.

SO AS IN THE MOST RECENT DATE, WHICH WAS JUST ABOUT A WEEK OR SO AGO IN FORT BEND COUNTY, IT WAS DOWN A LITTLE LESS THAN 12%.

WE'RE NOT MOVING AROUND QUITE AS MUCH AS WE USED TO.

IT'S FASCINATING THAT YOU CAN LITERALLY DO THAT WITH CELL PHONE DATA THAT HAS AN EFFECT ON PEOPLE GOING OUT.

THIS IS SMALL BUSINESS REVENUE, THE GAP, AND THAT WAS THE SNOWPOCALYPSE THAT HAD, UM, MOSTLY IN CENTRAL TEXAS, BUT SOMEWHAT

[00:10:01]

IT'S DOWN 53% FROM WHERE IT WAS BEFORE THE PANDEMIC.

AND AGAIN, UH, YOU KNOW, A NUMBER OF SMALL BUSINESSES OPEN IS DOWN BY ABOUT A THIRD IN FORT BEND COUNTY.

LET'S GET BY SOME OF THESE ON THE HOUSING MARKET JUST TO GIVE YOU AGAIN.

UH, THIS IS ALL JUST STUFF TO GIVE YOU A GENERAL SENSE HERE.

THIS ONE IS PRETTY INTERESTING.

THIS IS THE MONTHS OF AVAILABLE HOUSING FOR SALE.

AND THE LINE OF DEMARCATION IS TYPICALLY SIX MONTHS.

THAT'S KIND OF WHERE YOU BALANCE BETWEEN A BUYER AND SELLERS MARKET, FORT BEND COUNTY.

ONE MONTH, IT'S A SELLERS MARKET FOR SURE, TRAVIS COUNTY RIGHT NOW, A QUARTER OF A MONTH, GIVE YOU A FRAME OF REFERENCE.

SO THIS HAS CHANGED A LITTLE BIT.

I WENT TOO FAST FOR A LITTLE BIT.

THIS IS THE EMPLOYMENT GROWTH.

AND I JUST DID THIS DECEMBER TO DECEMBER.

YOUR UNEMPLOYMENT RATE IS RIGHT NOW DECOUPLED FROM YOUR SALES TAX REVENUE AND YOUR EMPLOYMENT GROWTH.

YOU STILL HAVE A NEGATIVE NUMBER IN DECEMBER OF 2020 COMPARED TO DECEMBER OF 2019.

I THINK A LOT OF THAT HAS TO DO WITH THE THINGS WE WERE TALKING ABOUT WITH SMALL BUSINESSES.

I ALSO THINK IT FRANKLY HAS TO DO WITH PEOPLE CHOOSING NOT TO GO BACK TO WORK BECAUSE OF PUBLIC HEALTH CONCERNS.

SO THAT'S PART OF THE MIX.

AND THEN ON THIS NEXT CHART, THIS IS THE MISSOURI CITY UNEMPLOYMENT RATE.

AND YOU CAN SEE IT FOLLOWS TEXAS PRETTY CLOSELY.

THIS IS HIGHER THAN IT SHOULD BE.

AND ONE OF THE REASONS WHY IT'S HIGHER THAN IT SHOULD BE IS BECAUSE OF ENHANCED UNEMPLOYMENT.

SO I DID A STYLIZED THING.

IMAGINE YOU WERE MAKING 12 BUCKS AN HOUR.

IF YOU WORK 2080 HOURS.

IN OTHER WORDS, 52 WEEKS, A YEAR, THAT'S A LITTLE UNDER $25,000 A YEAR.

IF YOU HAD BEEN MAKING THAT AMOUNT OF MONEY AND YOU FILED FOR UNEMPLOYMENT BENEFITS FROM THE STATE OF TEXAS, THE STATE WOULD GIVE YOU 250 BUCKS A WEEK BECAUSE OF THE CURRENT FEDERAL PLANS.

YOU GET $300 A WEEK ON TOP OF THAT.

SO NOW YOU'RE GETTING A TOTAL OF $550 A WEEK.

THAT'S THE EQUIVALENT OF $28,600 PER YEAR.

AND THE FIRST $10,200.

IT'S NOT SUBJECT TO FEDERAL INCOME TAX.

SO YOU HAVE A COMPELLING INCENTIVE NOT TO GO BACK TO WORK BECAUSE YOU'RE PUTTING MORE MONEY IN YOUR POCKET BY COLLECTING UNEMPLOYMENT.

THEN YOU ARE ACTUALLY DOING A JOB.

AND SO I PUT DOWN HERE JUST BY, BY WAY FRAME OF REFERENCE, WHAT HOURLY WAGES ARE ACCORDING TO INDEED FOR MISSOURI CITY, TEXAS IN THE U S FOR SOME OF THESE OCCUPATIONS THAT ARE VERY CUSTOMER FACING.

AND YOU CAN SEE WHY PEOPLE ARE HAVING A HARD TIME HIRING THAT WILL CHANGE.

PRESUMABLY IN SEPTEMBER WHEN PRESUMABLY THE ENHANCED FEDERAL UNEMPLOYMENT WILL COME OFF THE BOOKS.

BUT RIGHT NOW IT'S TOUGH.

MOST PEOPLE I TALK TO SAY, YEAH, WE'LL GET 65 RESUMES.

WE'LL GET FOUR INTERVIEWS.

WE MIGHT HIRE ONE GUY SKIP BY THE POPULATION GROWTH.

THIS IS INTERESTING.

THIS IS E-COMMERCE AS A SHARE OF RETAIL DONE BY QUARTER, LOOK AT THE SKYROCKET.

AND THIS IS NATIONAL LOOK AT THE SKYROCKET IN THE SECOND QUARTER OF LAST YEAR.

SO I'LL RUN TO THE PANDEMIC.

THAT IS A CHANGE THAT THE LONG-TERM TREND CLEARLY WAS GROWING, BUT LOOK AT HOW IT JUMPED UP AS WE WERE IN THE PANDEMIC, IT'S CALMED BACK DOWN, BUT IT'S STILL SIGNIFICANTLY ABOVE WHERE IT WAS.

I JUST FIND THAT INTERESTING.

SO HERE WE ARE YOUR ANNUAL CALENDAR, YOUR CALENDAR, YOUR SALES TAX REVENUE.

SO I THOUGHT LAST YEAR, THINGS WERE GOING TO DECLINE.

I WAS COMPLETELY WRONG AND COMPLETELY WRONG FOR A VARIETY OF REASONS.

ONE HAS TO DO WITH ALL THIS MONEY.

WE'VE PUMPED INTO THE ECONOMY.

TWO HAS TO DO WITH THE FACT WE ARE NOW DOING FAR MORE SHOPPING, CLOSE TO WHERE WE LIVE, IF NOT DIRECTLY AT HOME THAN WHERE WE WORK.

AND AS A RESULT, COMMUNITIES LIKE MISSOURI CITY REALLY BENEFIT FROM THAT.

I THINK THERE WAS A TREMENDOUS AMOUNT OF LEAKAGE IN THE PAST OF DOLLARS THAT RESIDED IN MISSOURI CITY THAT WENT SHOPPING SOMEWHERE ELSE.

I THINK TODAY THAT SITUATION HAS CHANGED.

AND I THINK THAT'S BEEN VERY POSITIVE.

AGAIN, THIS IS CALENDAR YEAR, LOOK AT HOW YOU'VE DONE IN COMPARISON TO SOME OTHER COMMUNITIES.

SO THE URBAN CENTERS SUCH AS AUSTIN, SUCH AS DALLAS, SUCH AS HOUSTON, SUCH AS SAN ANTONIO FORT WORTH ARE ALL DOWN CALENDAR YEAR 20 COMPARED TO CALENDAR YEAR 19, MISSOURI CITIES UP PEAR LANDS UP ROSENBERG'S UP, SUGARLAND IS DOWN.

THAT'S INTERESTING.

I'M NOT ENTIRELY SURE WHY THAT IS, BUT THE SAME PATTERN IS TRUE.

NEW BRAUNFELS HAS SKYROCKETED ROUND ROCK AND GEORGETOWN NEAR AUSTIN HAS SKYROCKETED.

AGAIN, WE SEE THE SUBURBAN COMMUNITIES DOING FAR BETTER THAN THE URBAN COMMUNITIES.

AND SO AGAIN, THIS NEXT CHART, THAT'S HIGH STRAIN.

THAT'S THE FORECAST.

LET'S JUST GO TO WHAT IT LOOKS LIKE IN THE REAL WORLD.

I THINK YOU'RE ACTUALLY GOING TO FINISH THIS YEAR UP ABOUT 7.6% FISCAL YEAR 21, COMPARED TO YOUR FISCAL 20.

I THINK IT WILL THEN CALM BACK DOWN A LITTLE BIT AND YOU WILL WORK IN THE NEXT FIVE YEARS, SORT OF IN THE HIGH

[00:15:01]

AND THAT IS A REFLECTION.

ONE OF THESE KINDS OF LONG-TERM CHANGES.

I'M TALKING ABOUT WHERE I THINK WE'VE ALL LEARNED TO SHOP CLOSER TO WHERE WE LIVE.

I THINK THAT'S A PERMANENT CHANGE TO IT REFLECTS THE ONGOING RECOVERY OF THE ECONOMY.

AND IN THE NEAR TERM, WE'RE TALKING ABOUT THE ROARING TWENTIES, 21ST CENTURY VERSION.

ALL OF THAT PLAYS INTO THIS.

YOUR JOBS FORECAST IS WEIRD AGAIN, BECAUSE OF THE THINGS WE'VE TALKED ABOUT.

YOU'LL SEE A SIGNIFICANT RECOVERY IN DECEMBER OF 21 COMPARED TO DECEMBER OF 20, AFTER A SIGNIFICANT LOSS LAST YEAR, IT'S GOING TO LEVEL BACK OUT.

AND I THINK YOU'RE GOING TO SEE FAIRLY SLOW JOB GROWTH, BUT YOU'RE NOW GOING FORWARD, SALES TAX WILL GROW FAR MORE RAPIDLY THAN JOBS WILL.

THAT RELATIONSHIP I THINK HAS CHANGED BECAUSE OF THE THINGS WE'VE ALL LEARNED HERE IN THE PANDEMIC.

AND THEN JUST TO GIVE YOU SOME ALTERNATIVE SCENARIOS, I DID KIND OF A BASELINE, WHICH IS THE YELLOW.

THAT'S WHAT I JUST SHOWED YOU A PESSIMISTIC AND OPTIMISTIC.

I THINK IT'S ACTUALLY A FAIRLY NARROW RANGE.

I MEAN, I'LL NEVER GET IT RIGHT.

EXACTLY.

I NEVER HAVE.

I THINK I ACTUALLY BILL MAYBE ONE YEAR I DID, BUT JUST ONE TIME, BUT I THINK THIS IS THE GENERAL RANGE THAT I THINK I FEEL WOULD FEEL COMFORTABLE TELLING YOU AS POLICY MAKERS, YOU CAN FEEL COMFORTABLE EXPECT TO GO FORWARD.

I DON'T SEE A LOT.

THAT'S GOING TO CHANGE FROM THIS GENERAL RANGE.

AND SO THEN IN CONCLUSION, IT REALLY IS THE ROARING TWENTIES.

WE TALKED ABOUT A LOT OF THIS STUFF.

I THINK THAT REALLY MISSOURI CITY IS ACTUALLY BETTER POSITIONED COMING OUT OF THE PANDEMIC THAN YOU WERE GOING INTO IT.

AND I THINK THAT THAT'S GREAT NEWS TO BE ABLE TO SAY, I DON'T GET TO SAY THAT TO THE SAN ANTONIO CITY COUNCIL OR THE AUSTIN CITY COUNCIL OR ANYBODY ELSE.

SO WITH THAT, I'LL STOP QUESTIONS, COMMENTS, THOUGHTS, CONCERNS.

THANK YOU, JOHN.

YOU BET.

THANK YOU.

I ENJOYED THIS PRESENCE WHEN I WAS GOING THROUGH IT.

I REALLY ENJOYED IT.

IT'S REALLY GOOD ECONOMISTS.

DON'T HEAR THAT VERY WELL.

I'VE GOT ONE QUESTION MAYBE, UH, UH, IN THE, UH, SALES TAX REVENUE CHART, UH, 2018 STUCK OUT OF REAL ANOMALY.

WHAT DROVE THAT, UH, THAT PERCENTAGE TO SUCH A HIGH MARK.

IT'S A COUPLE OF THINGS.

ONE OF IT, IT WAS THAT OIL PRICE HAS PICKED BACK UP, BUT SECOND IS YOU WERE COMING OFF A VERY LOW BASE IN BOTH 16 AND 17 THINGS HAVE BEEN REALLY DOWN.

AND SO YOU GET THAT KIND OF BOUNCE EFFECT WHEN YOU'RE COMING OFF A LOW BASE.

AND FOR US, IT WAS ALSO, WE HAD 15 MONTHS, RIGHT? WELL, THAT'S ANOTHER GOOD REASON.

YEAH.

CAUSE WE SHIFTED OUR FISCAL YEAR.

ONE, ONE THING I WANTED TO MENTION TOO, FOR INSTANCE, ON THE E-COMMERCE AS A SHARE OF RETAIL AND THE INCREASE YOU'VE SEEN ON THAT, UH, AMAZON THEY'RE BUILDING HERE, RIGHT? THEY MOVED THEIR PLANS UP AS A RESULT OF WHAT WAS GOING ON IN THE CELL, THE CELLS THEY SEE TAKING ADVANTAGE OF THE MARKET.

AND SO THEY'VE DONE THAT IN OTHER PLACES AS WELL.

SO AGAIN, THAT'S ANOTHER SHIFT THAT'S GOING TO BE ABLE TO POSITIVELY AFFECT US AND BE A PART OF THAT, UH, ECONOMY AS WE MOVE FORWARD TOO.

SO I THINK IT'S, AND I'LL LEAVE IT WITH US.

I THINK THAT'S GREAT FOR MISSOURI CITY AND I THINK YOU SHOULD ABSOLUTELY TAKE ADVANTAGE OF IT.

THE DANGER IN ALL THAT IS EVERYWHERE.

IT STARTS TO LOOK LIKE EVERYWHERE ELSE.

AND SO AS YOU, AS A COMMUNITY, YOU'RE THINKING THROUGH THAT, TRY TO GET THE BEST OF BOTH WORLDS, TRY TO TAKE ADVANTAGE OF THAT AND TRY TO DO THINGS TO PRESERVE THE THINGS THAT MAKE MISSOURI CITY, NOT LIKE EVERYWHERE ELSE, BUT AS WE GO FURTHER INTO E-COMMERCE, UH, YOU KNOW, I THINK THERE WAS SOMETHING, UH, AT THE STATE LEVEL WE'RE TRYING TO, UH, SEE IF, UH, THE SALES TAX THAT, UH, WERE, UH, UH, COLLECTED, UH, COULD BE, UH, CREDITED TO THE LOCATION WHERE THE, UH, I SAY THE SALE WAS MADE, BUT NO, IT'S, IT'S IT'S POINT IT'S CALLED POINT OF ORIGIN VERSUS POINT OF DESTINATION.

I ACTUALLY WORKED ON THAT.

I DID A BUNCH OF WORK LOOKING AT WINNERS AND LOSERS ACROSS THE STATE, AND YOU'LL NOT BE SURPRISED TO HEAR THAT THERE WERE LOTS OF WINNERS AND LOTS OF LOSERS IF THAT HADN'T PASSED, WHICH IT'S NOT GOING TO MISSOURI CITY WOULD HAVE BEEN A BIG WINNER EVEN MORE.

SO YOU SAY YOU DIDN'T HAVE MUCH.

I WAS TOLD LAST WEEK, IT'S DEAD.

I MEAN, THINGS CHANGE, BUT THE GUYS WORKING ON IT, JOHN, UM, YOU KNOW, TODAY, GOVERNOR ABBOTT ANNOUNCED THAT HE WAS, UH, EFFECTIVE JUNE 26.

THEY'LL STOP GIVING OUT THE $300 A WEEK.

IS THAT GOING TO IMPACT THIS 7.6 NUMBER AS FAR AS SPENDING, YOU KNOW, I DON'T THINK SO.

IT MIGHT, IT MIGHT ROUND IT OFF A 10TH OR SOMETHING, BUT I DON'T THINK THAT'S THE BIG IMPACT.

I THINK THE BIG IMPACT OR MISSOURI CITY BUSINESSES ARE GOING TO HAVE A BETTER OPPORTUNITY TO HIRE PEOPLE BECAUSE OF THAT, BECAUSE NOW PEOPLE ARE PRETTY RATIONAL.

YOU KNOW? I MEAN, SOMETIMES WE DO NUTTY STUFF, BUT IF I GET IT, MOST PEOPLE

[00:20:01]

THE GUY LOOKS AT AND SAYS, I CAN PUT MORE MONEY IN MY POCKET, STAY IN HOME.

I'M GOING TO DO IT.

ESPECIALLY IF I DON'T HAVE TO TAKE ANY KIND OF A PUBLIC HEALTH RISK.

AND THAT WAS A THING FOR A LONG TIME NOW, AS WE ARE GETTING MORE VACCINATED AND AS MORE AND MORE PEOPLE ARE FEELING MORE COMFORTABLE, THAT'S NOT SUCH A THING, BUT I MADE THE FATAL MISTAKE OF INVESTING IN RESTAURANTS FOR A LONG TIME.

WE HAD A HARD TIME GETTING PEOPLE BECAUSE THEY WERE WORRIED ABOUT GETTING SICK.

AND WHAT SPECIFIC, OH, I'M SORRY.

IT'S OUR MOMS. IT'S HARD WHEN EVERYBODY'S MAD.

YOU CAN'T SEE AS EASILY.

I'M SORRY TO PREPARE FOR OUR PHYSICAL YEAR OF 2022.

UM, I'M JUST KIND OF CONCERNED BASICALLY.

THANK YOU SO MUCH.

UM, JUST ANY SPECIFIC DATA THAT SHE WAS SPECIFIED THAT WE'LL HONE IN MORE SPECIFICALLY TO OUR BUSINESSES, OUR SPOT BUSINESS AND OUR RESIDENTS.

SO I THINK ONE OF THE THINGS I WOULD WATCH IS THAT I WOULD TRY TO HAVE SOME CONVERSATIONS.

WELL, ACTUALLY ONE OF THE THINGS I WOULD REALLY WATCH IS I WOULD WATCH TO SEE HOW MANY OF YOUR RESIDENTS STARTED, STARTED GOING BACK TO THE OFFICE.

CAUSE MY IMPRESSION IS A LOT OF FOLKS, PARTICULARLY FOLKS, YOU KNOW, THERE'S A TON OF FOLKS IN MISSOURI WHO LIVE IN MISSOURI CITY, YOU WORK IN THE MEDICAL DISTRICT OVER AND A LOT OF THEM HAVE BEEN WORKING REMOTELY.

A LOT OF PEOPLE IN GENERAL HAVE BEEN WORKING REMOTELY.

SO THAT'D BE ONE OF THE THINGS I'D PAY ATTENTION TO.

IT'D BE TRYING TO GET A SENSE, MAYBE TALKING TO YOUR CHAMBERS, KIND OF WHAT PEOPLE ARE DOING IN TERMS OF GOING BACK TO THE OFFICE.

THAT'S ONE, TWO, I WOULD PAY ATTENTION TO YOUR SMALL BUSINESSES AND TALK TO THEM ABOUT THEIR CAPACITY ON HIRING PEOPLE.

UM, AND THREE, I WOULD PAY ATTENTION TO THE KIND OF THING BILL IS TALKING ABOUT, WHICH IS FOR EXAMPLE, THE AMAZON'S OF THE WORLD WHO ARE ACCELERATING THEIR EFFORTS TO CREATE PRESENCE AND SERVE THESE MARKETS.

AND SO I GUESS WHAT I'M REALLY SAYING IS IF YOU ASSUME THAT SOME OF THIS IS VALUABLE, TAKE IT AND THEN TRY TO FIND REAL WORLD WAYS TO CONTINUE TO EITHER VALIDATE IT OR SAY NO THINGS HAVE CHANGED.

THANK YOU, JOHN.

THANK YOU GUYS.

GOOD TO SEE YOU ALL.

ALL RIGHT.

ITEM

[2.(b) Discuss the midyear budget review. (Proposed presenter: Director of Financial Services Allena Portis)]

DEAR BUDGET REVIEW, WE HAVE OUR DIRECTOR OF FINANCIAL SERVICE ATLANTA.

HI, GOOD EVENING, MAYOR AND CITY COUNCIL TONIGHT, I'LL PRESENT AN OVERVIEW OF THE MID-YEAR BUDGET REPORT.

AND THE PURPOSE OF THIS REPORT IS TO PROVIDE AN ASSESSMENT OF THE CITY'S CURRENT BUDGET CONDITION BASED ON ACTUAL PERFORMANCE.

DURING THE FIRST SIX MONTHS OF THIS FISCAL YEAR INCLUDED IN THE REPORT OR FORECAST BASED ON TRENDS AND OTHER KNOWN INFORMATION, THEY ALSO INCLUDE RECOMMENDED BUDGET AMENDMENTS.

THE REPORT CONTAINS INFORMATION BY FUND TYPE, INCLUDING THE GENERAL FUND SPECIAL REVENUE FUNDS THAT SERVICE FAN CAPITAL PROJECT FUNDS AND UTILITY FUNDS BEING THE MAIN OPERATING FUND OF THE CITY.

THE GENERAL FUND HAS AN IN-DEPTH ANALYSIS BY REVENUE KIT, CATEGORY AND EXPENDITURE CATEGORY.

IT ALSO INCLUDES A FIVE-YEAR COMPARISONS AT THIS TIME.

I'LL BRIEFLY REVIEW THE HIGHLIGHTS OF THE REPORT.

BEGINNING WITH THE GENERAL FUND GENERAL FUND REVENUES ARE PROJECTED TO EXCEED BUDGET BY APPROXIMATELY 2.1 MILLION OR 3.3%.

THIS IS PRIMARILY DUE TO SALES TAX REVENUES HAS JUST DISCUSSED.

WE BELIEVE THAT WE WILL EXCEED BUDGET BY APPROXIMATELY $1.8 MILLION.

WE ALSO SEE AN INCREASE IN OUR BUILDING FEES.

WE BELIEVE WE'LL EXCEED BUDGET BY APPROXIMATELY 429,000 AND THAT'S AS A RESULT OF NEW COMMERCIAL AND RESIDENTIAL CONSTRUCTION IN THE GENERAL FUND, WE ALSO PROJECT SAVINGS IN THE AREA OF EXPENDITURES.

AND THIS IS PRIMARILY DUE TO PERSONNEL SAVINGS DUE TO VACANCIES.

THIS IS 1.8 MILLION, THE SAVINGS AND SUPPLIES AND MATERIALS.

AND THAT'S BASED ON STAFF, UM, WORKING FROM HOME TELECOMMUTING, A MAJORITY PART OF THE BEGINNING OF THE FISCAL YEAR.

AND WE ALSO HAVE A SAVINGS OF 1.5 MILLION IN ECONOMIC DEVELOPMENT.

THERE WILL BE TWO BUDGET AMENDMENTS PRESENTED TONIGHT FOR THE GENERAL FUND.

THE FIRST IS FOR ELECTION EXPENSES, WHICH WE'LL GO INTO LATER WITH THAT AMENDMENT.

AND THE OTHER IS FOR THE RENOVATION OF CITY HALL CITY COUNCIL CHAMBERS, WHICH YOU WILL HEAR A REPORT ON LATER TOO.

CAN I? SO REVENUE FUNDS OR THE SPECIAL REVENUE FUNDS INCLUDES FUNDS THAT CAN ONLY BE USED FOR A SPECIFIC PURPOSE.

THEY INCLUDE THE MISSOURI CITY DEVELOPMENT AUTHORITY, MUNICIPAL COURT FUNDS, POLICE, SEIZURE FUNDS, GRANT FUNDS, PARKLAND ZONE FUNDS, AUTO OCCUPANCY TAX AND PEG FUNDS.

UH, REVENUE IS ANTICIPATED TO BE BELOW BUDGET DUE TO A REDUCTION IN TRANSFERS FROM THE METRO

[00:25:01]

AND THIS IS FOR A DEVELOPER EXPENSE ASSOCIATED WITH THE PARK EIGHT 90 ECONOMIC INCENTIVE AGREEMENT.

REVENUE WILL BE DOWN, BUT EXPENDITURES WILL ALSO BE DOWN FOR THE SAME REASON.

AND THIS IS BECAUSE THEIR ASSESSED VALUATION WAS NOT AS HIGH AS ORIGINALLY INTENDED WHEN WE DEVELOP THE BUDGET AND THERE ARE NO BUDGET AMENDMENTS AT THIS TIME FOR THE SPECIAL REVENUE FUNDS, THE DEBT SERVICE FUND IS EXPECTED TO BE WITHIN BUDGET FOR BOTH REVENUES AND EXPENDITURES.

THERE ARE NO BUDGET AMENDMENTS REQUESTED.

THE CAPITAL PROJECT FUNDS INCLUDES FUNDS ACCUMULATED FOR USE IN THE CAPITAL IMPROVEMENT PROGRAMS. THIS INCLUDES FUNDS FOR SPECIFIC BOND PROCEEDS THE METRO FUND AND FUNDS SEPARATED BY PROJECT TYPE, SUCH AS TRANSPORTATION, DRAINAGE FACILITIES, PUBLIC SAFETY AND PARKS.

THESE FUNDS ALSO INCLUDE CERTAIN IMPACT FEE FUNDS.

REVENUE IS PROJECTED TO EXCEED BUDGET DUE TO INCREASE SALES TAX WITHIN THE METRO FUND AND FUNDS RECEIVED FOR THE NIGHT ROAD.

PROJECT EXPENDITURES ARE PROJECTED TO EXCEED BUDGET DUE TO THE KNIGHTS ROAD PROJECT AND THE CITY COUNCIL CHAMBER UPGRADE.

AND TONIGHT AT THE REGULAR COUNCIL MEETING, YOU'LL HEAR REPORTS ON BOTH THAT PROJECT, BOTH PROJECTS.

FOR THESE REASONS, WE RECOMMEND A BUDGET AMENDMENT THAT WILL BE PRESENTED TONIGHT, AND THIS AMENDMENT WILL BE IN THE METRO FUND TRANSPORTATION FUND AND THE FACILITIES FUNDS.

WE ALSO RECEIVED MORE PREMIUM WHEN WE ISSUED THE 2021 DEBT AND WE'RE REQUESTING A BUDGET AMENDMENT FOR, UH, THE PREMIUM, UH, BUT IT'S OFFSET BY BOND ISSUANCE COSTS BECAUSE THESE FUNDS WERE USED TO PAY BOND ISSUE.

ONCE COST UTILITY FUNDS INCLUDE VARIOUS OPERATING AND CONSTRUCTION FUNDS FOR WATER AND WASTEWATER.

UH, REVENUE EXCEEDS BUDGET IS PROJECTED TO EXCEED BUDGET DUE TO THE RECEIPT OF MUD 47 AND 48 CONTRIBUTIONS FOR THE MUSTANG BAYOU PROJECT, THE ASSOCIATED EXPENSES ALSO IMPACTING THE EXPENDITURE BUDGET.

AND FOR THIS REASON TONIGHT, WE WILL BE REQUESTING AMENDMENTS TO ACCOUNT FOR THIS REVENUE AND EXPENSE.

THE LOSS WILL BE REQUESTING AN AMENDMENT FOR THE FIRST DEBT SERVICE PAYMENT FOR THE 2021 DEBT ISSUE THAT WILL BE DUE.

YEAH, THE OTHER ENTERPRISE FUNDS INCLUDE THE GOLF COURSE, THE SOLID WASTE FUNDS.

THERE'S AN INCREASE OF 1.2% IN REVENUE.

AND THAT IS DUE TO AN INCREASE IN GOLF ROUNDS, WHICH YOU HEARD ABOUT TONIGHT.

I'M TYSON WITH LGC AND SERVICE CHARGES WERE ALSO PROJECTED TO BE BELOW BUDGET EXPENDITURES FOR THESE FUNDS, THE LAST FUNDS OR THE EQUIPMENT REPLACEMENT FUNDS, WHICH INCLUDES FLEET.

AND IT, UH, WE ARE ANTICIPATING THAT REVENUE WILL EXCEED BUDGET, SMALL AMOUNT DUE TO INTEREST PROBLEMS. AND WE ALSO ANTICIPATE THAT EXPENDITURES WITH WILL BE WITHIN BUDGET.

ALSO INCLUDED IN YOUR PACKET IS A FUND BALANCE REPORT.

THAT INCLUDES THE BEGINNING FUND BALANCE WITH, UH, ESTIMATES FOR REVENUE AND EXPENDITURES FOR EACH FUND.

AND AS YOU'LL SEE THAT ALL OF OUR, ALL OF OUR FUNDS ARE HEALTHY.

AND AT THIS TIME, IF THERE'S ANY QUESTIONS IN REGARDS TO, UH, THE MID-YEAR REPORT, THANK YOU.

MA'AM ANY QUESTIONS OR COMMENTS? I JUST WANTED TO SAY THAT THIS DID COME BEFORE THE FINANCIAL SERVICES COMMITTEE AND, UH, ALL THREE COMMITTEE MEMBERS WERE ACCEPTABLE OF THE REPORT.

OKAY.

THANK YOU.

11, WELL, TWO ITEM

[2.(c) Discuss the proposed ordinance establishing rules of conduct and an ethics commission. (Proposed presenter: City Attorney E. Joyce Iyamu)]

WE HAVE A PRESENTATION BY OUR CITY ATTORNEY.

GOOD EVENING, MAYOR AND MEMBERS OF COUNCIL.

THIS PROPOSED ORDINANCE WAS INITIALLY PROPOSED TO YOU ALL IN, IN A DIFFERENT FORM IN OCTOBER OF 2020 THAT PROPOSED ORDINANCE APPLIED CERTAIN STANDARDS OF CONDUCT ALL COUNCIL MEMBERS AND APPOINTED OFFICIALS.

THIS PROPOSED ORDINANCE APPLIES STANDARDS OF CONDUCT, NOT ONLY TO THOSE FACTS THAT WERE MENTIONED, BUT ALSO TO PFAFF AS WELL AS BOARD AND COMMISSION MEMBERS.

THE PROPOSED ORDINANCE PROVIDES FOR THE FOLLOWING.

IT ESTABLISHES AN ETHICS COMMISSION THAT IS APPOINTED BY THIS COUNCIL.

EACH MEMBER IS TO SERVE THREE YEAR TERMS WITH THE EXCEPTION OF THE INITIAL APPOINTEES WHO ARE APPOINTED TO EVEN NUMBER A TERMS. THOSE INDIVIDUALS WILL SERVE TWO YEAR TERMS SO THAT THE APPOINTED OFFICIALS ON THIS COMMITTEE CONSERVE STAGGERED TERMS, THE PROPOSED ORDINANCE ALSO CREATES VARIOUS STANDARDS OF CONDUCT.

AGAIN FOR STAFF APPOINTED OFFICIALS, COUNCIL MEMBERS, UM, INCLUDING PROHIBITING THE GRANTING OR INFLUENCING THE GRANTING OF SPECIAL CONSIDERATION TO INDIVIDUALS MAKING OR USING CITY RESOURCES FOR PERSONAL

[00:30:01]

IT IS IN YOUR PACKET AND I'M HAPPY AND WELCOME ANY COMMENTS THAT YOU WILL HAVE BEFORE THE PLACEMENT OF THIS ORDINANCE ON A REGULAR COUNCIL MEETING.

THANK YOU, JOSIE.

IS THERE ANY COUNCIL DISCUSSION? YEAH.

UM, MAYOR, YOU KNOW, UH, BACK IN OCTOBER OF LAST YEAR, UH, WELL ACTUALLY PRIOR TO THAT, UH, IN SEPTEMBER, I, UH, GOT WITH THE CITY SECRETARY, I MEAN, EXCUSE ME, THE CITY ATTORNEY, UH, TO DRAFT AN ORDINANCE, UH, THAT I WANTED TO BRING BEFORE.

UM, MY COLLEAGUES, YOU WERE, UH, UN COUNCIL WOMAN, UH, CLOUDS THAT WERE NOT ON AT THE TIME, BUT NONETHELESS, UH, YOU KNOW, FOR ABOUT A MONTH, YOU KNOW, I WANTED US TO DISCUSS, POSSIBLY BRINGING THIS FORTH AS AN ORDINANCE.

AND INITIALLY THE CONVERSATION WAS TO CONSIDER ELECTED OFFICIALS, UH, MAYOR AND COUNCIL AND APPOINTED OFFICIALS.

AND OF COURSE I, I THREW OUT THE IDEA OF CONSIDERING POTENTIALLY ADDING BOARD MEMBERS, COMMISSION, COMMITTEE MEMBERS, ET CETERA.

UH, SO FAST FORWARD A MONTH, UH, AFTER THAT IT WAS BROUGHT BACK FORTH BEFORE A COUNCIL AND VOTED DOWN.

UM, THE ONE THING THAT I WILL SAY RELATIVE TO THIS NEW PROPOSAL, I HAVE NOTHING, UH, THAT I SEE THAT AS THAT'S WRONG WITH THE ORDINANCE, BUT I DO BELIEVE THAT INCLUDING STAFF ON THIS IS NOT, UM, SOMETHING THAT I WOULD BE IN AGREEMENT WITH BECAUSE, UH, BILL, DO YOU ALL HAVE A CODE OF CONDUCT OR PERSONNEL POLICY ALREADY IN PLACE? OKAY.

SO WITH THAT BEING SAID, I DON'T THINK IT'S, UH, YOU KNOW, THE BUSINESS OF AN ETHICS COMMISSION TO HAVE ANY TYPE OF COMPLAINTS BROUGHT BEFORE IT, BECAUSE THEY COULD GET EXTREMELY CUMBERSOME AND BOGGED DOWN AND POTENTIALLY COSTLY.

OKAY.

THANK YOU.

ANY OTHER DISCUSSION, CAN YOU GIVE US A ROUGH ESTIMATE OF HOW MUCH WE COULD POTENTIALLY BE FACED WITH WHEN WE HIRE OUTSIDE COUNSEL TO PRETTY MUCH, UM, ADDRESS THE ISSUES OR THE COMPLIANCE THAT'S BROUGHT FORTH BY, IT DEPENDS ON WHICH OUTSIDE FIRM IS HIRED.

UH, AS YOU WELL KNOW, JUST IN YOUR EXPERIENCE ON COUNCIL, PRIVATE, EXTERNAL FIRMS RANGE, UM, THEIR, UH, THEIR HOURLY AMOUNTS RANGE FROM ABOUT $300 AN HOUR TO $600 AN HOUR.

UM, SOME INCREDIBLY SPECIALIZED ATTORNEYS EVEN CHARGE A THOUSAND DOLLARS AN HOUR, BUT I, I DON'T KNOW THAT WE WOULD NEED THAT FOR THIS TYPE OF, UM, THIS TYPE OF PROJECT.

SO IT, IT DEPENDS.

IT ALSO WOULD DEPEND ON THE, THE TYPE OF INVESTIGATION THAT IS BEING CONDUCTED.

IF IT'S A MINOR TYPE OF INFRACTION WHEREBY MAYBE ONE OR TWO PEOPLE ARE BEING INTERVIEWED, THAT SORT OF INVESTIGATION WOULD NOT COST A LARGE AMOUNT OF MONEY.

IF YOU HAVE A WIDE RANGING INVESTIGATION, WHEREBY 20 PEOPLE ARE BEING INTERVIEWED, THAT WOULD OF COURSE TAKE UP A LOT MORE TIME, WHICH WOULD COST ADDITIONAL FUNDING THE WAY THIS IS BEING PROPOSED, AT LEAST FROM STAFF'S PERSPECTIVE IS THAT THE CITY ATTORNEY'S OFFICE WOULD CONDUCT THE INVESTIGATION UNLESS IT WAS AN INVESTIGATION OF THE CITY ATTORNEY'S OFFICE.

SO THAT WOULD BE THE, UH, AT LEAST THIS IS THE WAY WE'RE WE'RE, UM, PROPOSING IT.

THAT WOULD BE THE ONLY INSTANCE IN WHICH YOU COUNSEL WOULD HAVE TO THEN SELECT AN EXTERNAL, UM, TO CONDUCT THE INVESTIGATION.

I WILL SAY THOUGH, UM, THAT THE CITY ATTORNEY'S OFFICE NOW HAS THE ABILITY TO, WITHIN OUR BUDGET TO CONTRACT WITH THIRD PARTY, UH, EXTERNAL COUNSEL FOR SPECIAL LEGAL SERVICES.

WE DON'T DO THAT A WHOLE LOT, BUT WITHIN OUR BUDGET, WE CERTAINLY HAVE DONE THAT IN THE PAST.

AND IF THERE'S A NEED TO, ON A MATTER, WE, YOU KNOW, THAT WOULD BE SOMETHING THAT WE COULD POSSIBLY DO.

FOR EXAMPLE, IF AN INVESTIGATION IS OF A MEMBER OF THE COUNCIL, YOU KNOW, I WILL TELL YOU RIGHT NOW, I WILL PROBABLY WANT TO HIRE AN EXTERNAL THIRD PARTY, UH, FOR IT, LOOK AT THAT.

OH, WELL, HOW LONG, I MEAN, I KNOW YOU JUST GAVE US A BREAKDOWN, BUT I JUST WANT TO CLEAR UNDERSTANDING OF HOW LONG A POTENTIAL INVESTIGATION, UM, FOR HOURLY RATE OF A THOUSAND, I'M SORRY, 1,300, 300 TO A THOUSAND

[00:35:01]

SO GENERALLY I WOULD SAY THERE WOULD BE 300 TO ABOUT 600 AN HOUR.

UM, BUT THAT WOULD BE FOR THIRD PARTY INVESTIGATION.

MY QUESTION IS IF I PUT STATICALLY, THERE WAS AN INVESTIGATION ON AN ONE OF OUR COLLEAGUES ON THE DIAS, ALL ALONG SINCE YOU PROJECT WITHIN YOUR EXPERTISE, AN INVESTIGATION LASTED WITH US HAVING A CONTRACT THAT OF A THIRD PARTY COUNSELOR, I WOULD THINK WEAK THE WAY THIS ORDINANCE HAS DRAFTED A REPORT WOULD HAVE TO BE PROVIDED TO THE ETHICS COMMISSION 15 DAYS OF RECEIVING THE ACTUAL COMPLAINT.

SO I WOULD THINK THAT WITHIN A WEEK, LET'S SAY MAYBE FOUR HOURS, AND THIS IS JUST AN ESTIMATE AND IT REALLY, IT'S INCREDIBLY DIFFICULT TO S TO MAKE US ESTIMATION WITHOUT HAVING SPECIFIC FACTS AT HAND, BECAUSE THAT WOULD REALLY DETERMINE HOW LONG IT WOULD TAKE.

BUT I MEAN, IT COULD TAKE, LET'S SAY FOUR HOURS A DAY, FIVE DAYS A WEEK, WHICH IS FIVE DAYS.

SO 20 HOURS, UM, 20 HOURS, TIMES $300 AN HOUR.

IT'S ABOUT $6,000.

I MEAN, I'M NOT OPPOSED.

I THINK IT'S PRETTY GOOD THERE.

WE'RE HAVING SOME TYPE OF CHECKS AND BALANCES THERE.

I'M JUST KIND OF CONCERNED THAT THE LINDSEY AMOUNT OF MONEY THAT WE'RE GOING TO BE POTENTIALLY DISHING OUT.

AND I KNOW SOMETIMES YOU GET ISSUES THAT MIGHT NOT, YOU KNOW, BE SEVERE THAT CAN THROW THEM OUT, BUT CONTINGENT ON.

IF IT IS, IT'S GOING TO BE A HUGE PRICE THAT I WILL SAY THAT, UM, STAFF HAS TALKED TO A FEW CITIES THAT HAVE ETHICS COMMISSIONS AND THEN HAVE UTILIZE OUTSIDE COUNSEL.

AND MOST OF THOSE CITIES STATE THAT THEY'VE ONLY HAD TO CONDUCT ONE MOST, TWO INVESTIGATIONS PER YEAR.

I MEAN, THAT OF COURSE DEPENDS ON THE COMPLAINT, THE NUMBER OF COMPLAINTS THE CITY RECEIVES, BUT YOU KNOW, THAT NUMBER IS ACTUALLY FROM THE CITY OF HOUSTON, WHICH IS MUCH LARGER THAN MISSOURI CITY.

SO IF WE LOOK AT SOMETHING LIKE THAT, UM, TWO COMPLAINTS, EXTERNAL COMPLAINTS LIKE THAT PER YEAR, THEN THAT WOULD BE MAYBE, MAYBE $12,000 IF WE WOULD HAVE TO GO.

BUT AGAIN, THE HOPE IS THAT THE CITY ATTORNEY'S OFFICE, YOU KNOW, WE HAVE ANOTHER ATTORNEY STARTING NEXT WEEK.

UM, OUR HOPE IS THAT THE CITY ATTORNEY'S OFFICE WOULD BE ABLE TO COVER THE MAJORITY OF THE INVESTIGATIONS TO KEEP COSTS DOWN LAST POINT, UM, BEFORE I TURN IT OVER TO MY COLLEAGUES, UM, I'M NOT OPPOSED TO ACTUALLY INCLUDING THE STAFF, UM, AND THIS COMMISSION, I THINK IT'LL BE GREAT TO ADD ANOTHER LAYER OF TRANSPARENCY.

I KNOW WE'VE HAD SOME STAFF ISSUES THAT WE HAD TO PERSONALLY VET, UM, AND KIND OF AIR ON OUT AND, UM, OUR CODE OF CONDUCT OR ETHICS OR WHATNOT.

I JUST DON'T THINK IT HAS ENOUGH TEETH IF THAT'S THE CASE, WE WOULD NOT HAVE THOSE ISSUES BEING BROUGHT TO US.

SO I THINK IT'S GREAT IF WE ADD THAT LAYER, UM, EXTRA LAYER OF COMPONENT OF TRANSPARENCY.

THANK YOU.

ANY OTHER QUESTIONS OR COMMENTS? YEAH.

WHEN WE LOOK AT, UH, AN ETHICS COMMISSION, UM, I THINK, UH, AND WE TALK A LITTLE BIT ABOUT COSTS.

YOU KNOW, WE SPEND A LOT OF DOLLARS ON INTERNAL AND EXTERNAL AUDITS AND WHAT WE'RE TRYING TO DO THERE IS TO MAKE SURE THAT WE'RE CONFORMING TO WHATEVER THE NORMS IS AND, YOU KNOW, WHATEVER THE LAW, UH, WOULD, UH, WOULD, UH, SUPPORT OR PROVIDE.

SO TO HAVE A, UH, AN ETHICS COMMISSION AND IT MAY COST SOME DOLLARS.

I THINK IT'S WELL SPENT.

I, LIKE I SAY, WE TAKE A, UH, A, UH, AN APPROACH THAT ALL IN THE INTERNAL AUDITS AND EXTERNAL ON US, ON OUR FINANCIAL BOOKS.

SO TO ME, THIS IS JUST ANOTHER LEVEL OF, UH, OF, UH, UH, OBSERVATION OF WHAT'S GOING ON EITHER, YOU KNOW, AT THE STAFF LEVEL OR AT THE, UH, THE COUNCIL LEVEL.

AND, UH, ALSO THE, UH, THE, UH, UH, COMMISSIONS AND BOARDS.

I HAVE ONE QUESTION W IF YOU BRING IN COMMISSIONS AND BOARDS, WILL THEY BE, UH, UH, REQUIRED TO, I GUESS, UH, BE, UH, REVIEWED UNDER THE SAME, UH, STANDARDS THAT, UH, EXECUTIVES WITH OUR IS BECAUSE THEY ARE, YOU KNOW, A DIFFERENT ANIMAL, IF YOU WILL, THAT THERE MIGHT HAVE TO BE SOME, UH, ADDITIONAL TWEAKS TO, UH, TO THE ORDINANCE TO COVER THAT.

UM, SO THEY'RE ACTUALLY INCLUDED IN THIS PROPOSED ORDINANCE BEFORE YOU, UM, THERE WOULD NOT NEED TO BE ANY ADDITIONAL TWEAKS.

THEY WOULD BE COVERED UNDER THE SAME STANDARDS OF CONDUCT THAT COUNCIL AND APPOINTED OFFICIALS AND STAFF MEMBERS ARE COVERED BY, IN THIS PROPOSAL.

OKAY.

THANK YOU.

OKAY.

SO

[00:40:01]

I JUST HAVE A QUICK COMMENT.

I THINK, UM, I LIKED THE OPPORTUNITY TO HAVE THAT THINGS COMMISSION IN PLACE, BUT I WOULD ALSO MAKE A SUGGESTION TO LEAVE STAFF OUT OF IT.

I THINK IT SHOULD BE MORE OF CITY COUNCIL AND APPOINTED, WHICH IS, UH, YOU KNOW, YOUR BOARD AND COMMISSION ON, ON TOP OF THAT.

SO HE GOES, DO YOU, ARE YOU NEEDING A MOTION OR IS THIS A DISCUSSION TODAY? THE DISCUSSION, HOWEVER, BECAUSE THERE DOES APPEAR TO BE, UM, SOME, UM, INCONSISTENCY ABOUT WHAT YOU ALL WOULD LIKE.

I WOULD LIKE TO ASK FOR A MOTION AS TO WHETHER TO INCLUDE STAFF OR NOT.

SO THAT THE NEXT TIME THIS IS PRESENTED, IT CAN BE IN FINAL ORDINANCE FORM BASED ON WHAT A MAJORITY OF YOU DESIRE TO HAVE INCLUDED IN THE PROPOSED ORDER.

OKAY.

I'D LIKE TO MAKE A MOTION TO, UM, MOVE FORWARD WITH THE PROPOSED ORDINANCE SETTING STANDARDS OF CONDUCT AND ESTABLISHING AN ETHICS COMMISSION THAT INCLUDES CITY COUNCIL, THE MAYOR APPOINTED OFFICIALS AND BOARDS AND COMMISSIONS AND COMMITTEE MEMBERS.

I'LL SECOND THAT MOTION.

OKAY.

SO THERE'S BEEN A MOTION BY COUNCILMAN REVOLTING A SECOND BY COUNCIL MEMBER EMORY, BEFORE WE VOTE ON A, CAN YOU JUST REPEAT THAT MOTION ONE MORE TIME, I GUESS FOR COUNCIL, BONNIE MADE A MOTION TO MOVE THE ORDINANCE FORWARD TO A REGULAR COUNCIL MEETING, INCLUDING, UH, OR TO INCLUDE COUNCIL MEMBERS, THE MAYOR BOARDS AND COMMISSIONS, AND APPOINTED OFFICIAL, IGNORE THE DISCUSSIONS.

WE'LL GO AHEAD AND VOTE.

I DO HAVE, I DO HAVE A DISCUSSION.

I KNOW YOU GUYS ARE IN FAVOR OF NOT ALLOWING STAFF TO BE HONEST PERMISSION, BUT, UM, AS MR. EMORY JUST STATED THAT STAFF ARE INVOLVED IN AUDITS AND INVESTIGATIONS, AND IT'S HYPOTHETICALLY WHOEVER'S INVOLVED IN THE AUDITS OR AN INVESTIGATION TEND TO BE UNETHICAL, THEY ARE LEADING THAT TYPE OF INVESTIGATION OR A PART OF THAT AUDIT WHILE PROVIDING WHATEVER PERTINENT INFORMATION THAT COULD PRETTY BE PRETTY MUCH BE, UM, DETRIMENTAL TO THE INVESTIGATION.

SO ALL I'M SAYING IS IF THAT PERSON IS HYPOTHETICALLY UNETHICAL, THEY ARE PART OF THAT PROCESS.

AND THAT'S WHY I FEEL AS IF WE ARE GOING TO HAVE AN ETHICS COMMISSION, THEY SHOULDN'T BE ALLOWED TO STILL BE INCLUDED, BUT THAT'S MY POINT.

I'M READY TO VOTE.

THANK YOU.

AND I THINK I GO BACK TO YOU, BILL IS THAT WE HAVE A CITY HR DEPARTMENT AND WE HAVE A DIFFERENT DIRECTORS AND WE HAVE PROCESSES IN PLACE, AND I'M SURE WE HAVE PIP.

WE HAVE WRITTEN COMPLAINTS.

WE HAVE ALL OF THOSE THINGS.

I WOULD SUGGEST THAT WE MAKE SURE THAT WE KEEP THOSE THINGS FLOWING FOR.

IT DOESN'T MATTER, YOU KNOW, FROM ANY EMPLOYEE, BESIDES THE ONES THAT HAVE JUST REPORTING TO CITY COUNCIL.

AND I HOPE THAT'S IN PLACE TODAY AND WHERE YES, AND THAT IS AN EMPLOYMENT MATTER.

AND THEY FOUND TO HAVE DONE THAT THROUGH THE EMPLOYMENT PROCESS AND REVIEW THEIR ACTIONS.

THEY WOULD BE TERMINATED BASED ON THE ACTION THAT THEY TOOK THAT WAS NOT IN ACCORDANCE WITH PERSONNEL POLICY.

OKAY.

OKAY.

I JUST WANTED TO MAKE SURE THAT THE MOTION THAT I SECONDED IT DID NOT INCLUDE STAFF THAT'S CORRECT.

IS THAT CORRECT? OKAY.

THANK YOU.

YOU MENTIONED THAT YOU HAVE A CODE OF CONDUCT POLICY INCLUDE THE PROCESSES AND INVESTIGATION AS WELL WITH YOUR HR DEPARTMENT.

YES.

YES.

AND AT TIMES WHEN WE'VE HAD ISSUES THAT HAVE COME UP, WE'VE HAD THE CITY ATTORNEY'S OFFICE TO LOOK INTO THOSE MATTERS.

IF THERE'S SOMETHING THAT GOES DEEPER OR WE STILL LIKE THEIR DOG, BE SOMEBODY FROM AN OUTSIDE PERSPECTIVE, WE BROUGHT PEOPLE IN JUST TO SAY, WE'RE TALKING ABOUT FROM THE STANDPOINT OF A, UH, ETHICS COMMISSION.

HOWEVER, AGAIN, I BELIEVE THIS IS AN EMPLOYMENT MATTER MORE SO THAN THEN ETHICS ARE COVERED WITHIN THAT POLICY THAT MAKE AN EMPLOYMENT MATTER.

BILL.

I MEAN, I THINK AT THE LAST MEETING I HEARD YOU LOUD AND CLEAR IS ONE OF THE THINGS THAT I THINK YOU ASKED OF CITY COUNCIL WAS THE TRUST TO TRUST YOU ALL, TO DO YOUR JOB.

AND THEN ALSO THAT WE TRUST YOU TO DO JOB AND KEEPING EVERYTHING THAT'S DOCUMENTED.

AND UP-TO-DATE TOO.

AND THAT'S WAS PART OF OUR STRATEGIC GOALS THAT WE'RE WORKING TOWARDS LOVE JASON.

SO, I MEAN, I AGREE WITH THE MOTION.

THESE ARE MY PERSONAL COMMENTS.

I DON'T THINK STAFF NEEDS TO BE PUT INTO THIS AS AN ETHICS COMMISSION.

I THINK WE HAVE, WE SHOULD HAVE.